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The $1.9 trillion stimulus should be large because the need is large

Rob Johnson appeared on the Background Briefing with Ian Masters to discuss working with Trumpsters, the source of their anguish, and important pathways to healing

Conservative legal theory is based on a shoddy definition of what constitutes “efficiency”

Conservative legal theory is based on a shoddy definition of what constitutes “efficiency”

Two separate INET funded research articles are cited; first from Schularick, Jordà, & Taylor on leveraged bubbles followed by Bao, Hommes, & Makarewicz on bubble formation. “Since their inception, financial markets, and to a lesser extent some real markets, have been subject to bubbles. … More recently, stock prices, but also credit, real estate, commodities, bond markets, and famously, bitcoin, are all assets that have experienced bubble episodes. Regarding cryptocurrencies, many economists also defend a permanent bubble, their fundamental value being theoretically non-existent.” …. In fact, the presence of bubbles in the markets (financial and real) seems to stem from the persistent behavior of economic agents. Experimental studies, controlling exactly the actual value, showed that participants tended to set up a bubble-like operation, with price surges and collapses very similar to real economy situations, and in no way related to a change in the market.

“Texas’ leaders knew as of 2011 … when the state went through a short severe freeze, that the system was radically unstable in extreme weather,” wrote James K. Galbraith, of the University of Texas at Austin, in the Institute for New Economic Thinking. “But they did nothing,” he wrote. “To do something, they would have had to regulate the system. And they didn’t want to regulate the system, because the providers, a rich source of campaign funding, didn’t want to be regulated and to have to spend on weatherization that was not needed – most of the time.” That’s what happens when the private sector calls the shots. Money first.” — Richard Gross, Counterpunch

“Economic opportunity was further restricted by individual and institutionalized racism and political disenfranchisement. Discrimination in hiring by employers and intimidation of black workers through violence placed black workers at a direct disadvantage in the labor market,” Trevon Logan Peter Temin wrote in “Inclusive American Economic History: Containing Slaves, Freedmen, Jim Crow Laws, and the Great Migration,” a working paper written for the Institute for New Economic Thinking.” — Coastal Review

Single-family home-ownership—elusive for many today—is an aspiration we ought to abandon

Does the COVID recession still have the potential to turn into a broader financial meltdown?

The IPCC was correct in emphasizing the need for early mitigation, but their analysis of possible growth trajectories appears to be faulty.

“We’re building a data system, because you can’t really manage a city if you don’t know who’s there and what’s in it.”

Legal scholar Dina Srinivasan talks to INET’s Lynn Parramore about restoring fairness to a regulatory Wild West.

Texas’s electricity market “reforms” made the current crisis inevitable

Labor-saving advances in AI may undo the gains from globalization and pose new challenges for economic development

Labor-saving advances in AI may undo the gains from globalization and pose new challenges for economic development

Revival of failed austerity policies of the past is simply not an option

“That Italy is “lazy to reform” is probably one of the most widespread myths - and has little to do with reality. In 2015, for example, the OECD rated Italy’s reform efforts as significantly higher than those of Germany and France. The Dutch economist Servaas Storm takes the same line. In an in-depth study, he found that Italian politics as a whole adhered much more closely to the (market-liberal) economic policy guidelines of the EU than Germany and France.” — Phillip Heimberger & Nikolaus Kowall, Makronom

James K. Galbraith slams “unreliable” report claiming that raising the minimum wage would reduce jobs

“The Biden administration must put a high enough price on carbon pollution to encourage the scale and urgency of action needed to meet the commitments it has made to Americans and the rest of the world. The future of our planet depends on it” — Nicholas Stern & Joseph Stiglitz, Project Syndicate

— European

William Janeway: Venture Capital in the 21st Century: ‘In this eight-part lecture series, Bill Janeway investigates the relationship between venture capital and technological innovation, and the interdependent roles of entrepreneurial firms, the mission-driven State and financial speculation in the overall innovation system… LINK: https://www.ineteconomics.org/perspectives/videos/venture-capital>

Is r/wallstreetbets really leading a financial revolution?

The Straight Truth

“Equitable COVID19 vaccine distribution is a very important issue of global solidarity”

The Future of Macroeconomics Institute for New Economic Thinking, via Naked Capitalism 2-2-21]

RSS PUBLISHED TO eState4Column5©2013 Political Economy Group DK PEG Anti-Capitalist Chat TAGS Culture Economy Employment Media MMT PoliticalEconomy publicpolicy stagflation WhiteHouse Share this article Let real wages (of $15+/hour) grow faster than labor productivity for some years, undoing the wage repression of the last decades. We have been misled by neoliberal economics for now many decades, it’s time to turn many things around in what is becoming a second-rated US economy, recently crippled by the malevolent and narcissistic “king of debt”. In economics, stagflation or recession-inflation is a situation in which the inflation rate is high, the economic growth rate slows, and unemployment remains steadily high. It presents a dilemma for economic policy, since actions intended to lower inflation may exacerbate unemployment. The biggest risk for the stock market in 2021 is inflation, according to Morgan Stanley. Unprecedented radical spending by the federal government and the Federal Reserve, to stave off a panic-induced market crash, helped artificially drive stocks to temporary new highs last year. www.laloftblog.com/… For some, the math bore out the possibility that exuberance was rational even if the economy is always more irrational than its math. “The Lucas fantasy of costless disinflation from credible commitments in an ergodic world of rational agents was decisively falsified long ago.” The underlying problems of supply shocks related to Trumpian idiocy atop bailing out the banksters may have made the economy much worse. The pandemic has only made a bad situation worse, or made more of us myopic in our isolation. Paul Krugman has now taken the time to question the orthodoxy of stagflation. Darn economic orthodoxy being wrong since the 1970s. Let me start with the inflation story the way most economists, myself included, have been telling. In the beginning was the Phillips curve: the apparent tradeoff, fairly visible in the data, between unemployment and inflation. In the 1960s many people looked at that tradeoff, considered the mild costs of inflation versus the benefits of lower unemployment, and argued for monetary and fiscal policies aimed at running the economy hot. But in a hugely influential speech Milton Friedman made an argument also independently made by Columbia’s Edmund Phelps: the unemployment-inflation tradeoff wasn’t real, because any sustained effort to keep unemployment low would lead not just to high inflation but to ever-accelerating inflation. They claimed, specifically, that people setting wages and prices would begin marking them up to anticipate future inflation, so that the inflation rate associated with any given unemployment rate would keep rising. They predicted, in particular, that the course of the economy over time would look something like this: https___bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com_public_images_81db75c8-59f2-4b95-a60a-fe404a50c119_914x5331.png First, a government would push unemployment down; but this would lead to ever-rising inflation, which would stay high even as the economy cooled. So it would take a sustained period of high unemployment to get inflation down again, until finally unemployment could be brought back to a sustainable level. So their analysis predicted “clockwise spirals” in unemployment and inflation. Then came the 1970s: https___bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com_public_images_1d91277a-44fe-422b-b0c3-f1dfa8fb7428_933x5501.png This sure looked like a dramatically successful out-of-sample prediction — sort of an economics version of “Light bends!” Almost everyone in the economics profession took the Friedman-Phelps analysis as confirmed. This in turn had big practical and intellectual consequences. First, governments and central banks stopped pursuing low unemployment, believing that excessively ambitious stimulus caused the stagflation of the 1970s. They began aiming for stable unemployment around the NAIRU —non-accelerating-inflation rate of unemployment — instead. Second, since the Friedman/Phelps prediction was based on trying to assess what rational price-setters would do, their apparent success gave a big boost to the notion that all economics should be based on maximizing behavior. Friedman always had too strong a reality sense to personally go down the rational-expectations rabbit hole that swallowed much of macroeconomics, but given the law of diminishing disciples it was bound to happen. Third, the whole affair gave a boost to conservative ideology. We had seemingly seem a demonstration of the limits to government action; also, the Chicago boys had seemingly been proved right about something big. (I remember classmates in grad school saying “They were right about this. Why don’t you think they’re right about the rest?”) Finally, the Volcker disinflation of the 1980s — using high unemployment to end high inflation — became, in many minds, the model of what responsible policymakers should do: make tough choices for the sake of the future. BUT WHAT IF WE’VE BEEN TELLING THE WRONG STORY ALL ALONG? […] But suppose something like this is true. In that case, the narrative that saw stagflation both as the cost of excessively ambitious macroeconomic policy and as a vindication of conservative economic ideas was mostly wrong. And that matters not just for history but for policy right now, which is still to some extent constrained by the fear of a 70s repeat. How do you ask someone to be the last worker to be unemployed for a mistake? paulkrugman.substack.com/… The reality in a response by Lance Taylor and Nelson Henrique Barbosa Filho is that “For practical purposes, the results mean that, for the Fed to meet its inflation target, it would be necessary to let real wages grow faster than labor productivity for some years, undoing the wage repression of the last decades. Biden’s $15 minimum-wage proposal is a correct step in that direction.” This is despite so many economists taking an opposite, more cautious position. — Daily Kos

Capacity, Scale, and Control

“Cultural theorist Lynn Parramore on the deep social effects of economic precarity, and her article “Epidemic of Despair Could Haunt America Long After COVID” at the Institute for New Economic Thinking. https://www.ineteconomics.org/perspectives/blog/epidemic-of-despair-could-haunt-america-long-after-covid” — Chuck Mertz,This is Hell!

“A recent study by the Institute for New Economic Thinking, painting a wider picture, shows that the effective reduction in emissions due to carbon pricing policy comes to between just 1 and 2.5 percent of the total.” — Ornaldo Gjergji, Osservatorio

“Panics are not needed for banking crises to have severe economic consequences,” says Emil Verner, the MIT professor who helped lead the study. “But when panics do occur, those tend to be the most severe episodes. Panics are an important amplification mechanism for banking crises, but not a necessary condition.” Indeed, in an ambitious piece of research, spanning 46 countries and going back to 1870, the study surveys banking crises that occurred with and without panics. When there is a panic and bank run, the research finds, a 30 percent decline in banking-sector equity predicts a 3.4 percent drop in real GDP (gross domestic product adjusted for inflation) after three years. But even without any creditor panic, a 30 percent decline in bank equity predicts a 2.7 percent drop in real GDP after three years.” — Peter Dizikes, MIT News

“Consider the following point made by Institute for New Economic Thinking executive director Rob Johnson during a recent interview when asked about Medicare for All: “Public opinion polls show more than 70 percent of the population is in favor of Medicare for All. It’s not the population that doesn’t want it, and they’re the ultimate voters. It’s vested interests and the struggle that has to do with the relationship between money-raising campaign war chests and the probability of re-election and what you might call the refractory influence of the mainstream media, where pharmaceutical companies in particular and insurance companies as well are very big advertisers.” — Luke Savage, Jacobin

Comment on Paul Krugman’s recent observations on US inflation

Researchers worry the pandemic may have severe after-effects, with deaths of despair impacting more distressed and newly-vulnerable populations

Black women are forfeiting $50 billion/year in the US due to the combined gender and racial wage gap.

Traditional economics, like the ethos of the “American Dream,” tells us that our individual talents and efforts determine whether or not we succeed in life. Yet, an overwhelming body of evidence shows that people of color have been denied the same opportunities to succeed in America. Race is not only a defining feature of social identity and an arbiter of access to power and privilege; for far too many Americans, race - a social construction - is a fundamental determinant of their economic destiny.

Developments in the real economy have persistently challenged central tenets of older economic thinking, such as the supposed close connection between the money supply and inflation.

Rethinking Crime and Inequality with Stratification Economics

“In taking over industrial companies, financial managers focus on the short run, because their salary and bonuses are based on current year’s performance. The “performance” in question is stock market performance. Stock prices have largely become independent from sales volume and profits, now that they are enhanced by corporations typically paying out some 92 percent of their revenue in dividends and stock buybacks.[6]” — Michael Hudson, Naked Capitalism [6]William Lazonick, “Profits Without Prosperity:Stock Buybacks Manipulate the Market and Leave Most Americans Worse Off,”Harvard Business Review, September 2014. And more recently, Lazonick and Jang-Sup Shin, Predatory Value Extraction: How the Looting of the Business Corporation Became the U.S. Norm and How Sustainable Prosperity Can Be Restored(Oxford: 2020).

Given the mounting need to create good jobs, effect structural change, and transform the economy, what should policy priorities be in the digital era? Is there a role for industrial policy? What new policy options do we need to achieve inclusive prosperity?

The Challenge to Bidenomics

“in addition to the author’s interpretations, there will also be a considerable list of texts and contributions that can be useful for approaching and deepening the economic debate and the developments of the alternative and post-Keynesian theoretical approach, even in its various currents. . The not obvious presence in the public debate of these topics makes the book an important reading in order to interpret the recent economic history of our country starting from the questions that the crisis triggered by the outbreak of the pandemic and the recipes prepared by the European and national institutions pose us. , of which however no shadow is seen in political decisions, having an interpretative key that escapes the mainstream logic is, even more so in this context, of crucial importance.” — Davide Romaniello, Sinistrainrete

“One place to look always is where’s the money? Who funds congress? Actually, there’s a very fine careful study of this by the leading scholar who deals with funding issues in politics, Thomas Ferguson. He and his colleagues did a study about a year ago a careful study in which they investigated a simple question, “what’s the correlation over the years many years between campaign funding and electability to congress?” It’s almost a straight line, it’s the kind of close correlation that you barely get in the social sciences. The greater the funding, the higher the electability. You can find a few cases here and there that aren’t right on the line, but from the standpoint of social science it’s a remarkable correlation.” — Noam Chomsky, Jacobin

“What I’d really like to see going forward is some sort of vision which is inclusive and forward-looking in the medium and long term about all these kinds of aspects welfare; health, education, environment. In the past, we’ve had a situation when we’ve looked at other countries which have made this transition to more advanced economies. They have always had some element of industrial policy thinking through how they actually going to shift their populations from low-productivity to high-productivity. Currently, I think we’re doing things with a hope and a prayer. Our growth models have fizzled out so far. What we’re looking for is something in the next three to five years which will be aimed at re-opening new markets, more inclusion, and really ensuring the wealth of a much much larger fraction of the population than we are currently doing.” — Arjun Jayadev, Bloomberg “Jayadev, a professor of economics at Azim Premji University, said India has returned home this year after decades of failure in providing access to quality health care for a large part of the population. If there is a silver lining, then the crisis will give the country a chance to “build better,” in the words of Jaydev. This includes at least three elements – an environment that is closely linked to health outcomes, with a medium-term plan to keep health and education spending at a consistently high level. – aimed at improving the quality of the environment and, finally, committed to support. one-third of these elements are something similar to a city employment program. The budget could also help immediately by universalizing the PDS and supporting revenues through direct remittances, Jayadev said. “Overall, short-term relief and long-term structural focus will help transition to a more inclusive and vital growth strategy that is missing in the current vision.” — Pallavi Nahata, Bloomberg

“One of the main reasons Italy’s economy is in such dire straits is its strict adherence to the EMU’s macroeconomic rule book — in particular the rules on fiscal austerity and structural reforms — as Dutch economist Servaas Storm painstakingly details in his article ‘Italy: How to Ruin a Country in Three Decades’” — Nick Corbishley, Naked Capitalism

“The gap between the “technology haves and have nots” in the corporate world is widening. A recent study also found that this gap is widening between rich countries and poor countries. When few companies have access to 3D printers, robots, or cutting-edge AI, there are fewer actors to leverage such technologies to the point at which productivity will increase across the board.” — Wim Naudé, The Conversation

“INET has supported a lot of brilliant academic work in areas such as Imperfect Knowledge Economics, financial regulation, human development, and environmental economics. Such research has helped to discredit the ideas – such as “perfect” competition, “efficient” markets, and “rational” expectations – that formed the ideological foundations for laissez-faire microeconomics, monetarist central banking, and irrational pre-Keynesian fiscal policy, especially in Europe. As such, it has done as much as INET’s other work – including policy research, academic community-building, and deepening collaboration with the International Monetary Fund, the OECD, and other official institutions – to end market fundamentalism’s intellectual monopoly.” — Anatole Kaletsky, Project Syndicate

“Best of Mankiw: Errors and Tangles in the World’s Best-Selling Economics Textbooks Peter Bofinger, former member of the German Council of Economic Experts [Naked Capitalism January 4, 2021] Mankiw has been lambasted a number of times by Adbusters, the Canadian group which originated the call for mass protests that became Occupy Wall Street. Also see Toxic Textbooks: “Mankiw’s textbook seems an ideal place to look for clues as to how both the economics profession and the public which it educates became so ignorant, misinformed and unobservant of how economies work in the real world.” The problem with the leadership of the Democratic Party at the state and national levels is not the caricature of maliciousness that the Trumpists believe, and which the Republicans have used to “feed red meat to their base,” but merely that the leadership has been taught, and believes and swills, the snake oil Mankiw peddles. Below, just a small sample of Bofinger’s detailed take-down of Mankiw.” — NB Books Community, Daily Kos

“To get into the mood for their [Charles Goodhart and Manoj Pradhan] ideas, you can listen to the authors talk about them to my colleague Stephanie Flanders on the Stephanomics podcast, or this podcast from the Institute for New Economic Thinking, or this episode of The Sound of Economics podcast from the Bruegel Institute.” — John Authers, Bloomberg

Recognizing that inflation of the value of output and its costs of production must be equal, we focus on a cost-based macroeconomic structuralist approach in contrast to micro-oriented monetarist analysis.

The economy is likely to be crippled for months and fiscal rescue on a large scale, once again, is very much necessary.

What are the choices we must make to ensure technology empowers, augments, rewards, and respects the majority, not the few, given its increasing defining role in future economies and societies?

Populist parties and the decline of progressive politics in Italy

This paper analyzes the role of local spending, particularly on social welfare, and local inequality as factors in the Italian political crisis following the adoption in 2011 of more radical national austerity measures.

While Africa’s “premature deindustrialization” appears to be the dominant global narrative, recent analysis of the data suggests that de-industrialization is not the common experience for the majority of African countries

Expert warns that it could be a race against the clock as the fast-spreading B117 variant picks up steam in the U.S.

Traditional welfare systems have emphasized the need for redistribution post-production. Are these policies sufficient in the future?

Expert warns that without more robust abatement measures and testing, the virus could rage until mid-2022.

In this interview, Camilla Toulmin and Folashadé Soulé speak with Carlos Lopes, Professor at the Nelson Mandela School of Public Governance, University of Cape Town, Visiting Professor at Sciences Po, Paris and an Associate Fellow at Chatham House, London

How the dream of a middle class existence collapsed, first for Blacks, then for more and more white American workers and what the Biden administration could do to retrieve the situation.

“The landscape of EM has consolidated into a few corporate conglomerates, which are oligarchies with iron grips on contracts through noncompetitive or illegal collusions with large hospital systems in the form of kickbacks. (Institute for New Economic Thinking. March 15, 2020; https://bit.ly/34fLeMD.) This has effectively castrated any hope for independent practices to thrive and injected many wrongful consequences into EM.” — Rizvi, Saba MD, Emergency Medical News

“But to my surprise, The Atlantic article explained that MIT economist Peter Temin, in his book “The Vanishing Middle Class: Prejudice and Power in a Dual Economy,” not only delved into the contributing factors to poverty and economic inequality, he offered systemic solutions. This approach made the piece a must-read for me because at Gainesville for All, we’re all about finding systemic solutions to problems linked to race and poverty. Temin offered five proposals he believes can help tip the scales favorably for those stuck in the lower class.”— James F. Lawrence, Gainsville Sun

“When Texas and nine other states filed an antitrust lawsuit against Google last week, the complaint identified many of the same conflicts of interest as Ms. Srinivasan’s paper, Why Google Dominates Advertising Markets” in the Stanford Technology Law Review. The lawsuit said Google controlled every part of the digital advertising pipeline and used it to give priority to its own services, acting as “pitcher, batter and umpire, all at the same time.” … “Marshall Steinbaum, an assistant professor at the University of Utah’s economics department, wrote on Twitter that Ms. Srinivasan’s articles on Google and Facebook had a greater influence on the recently filed antitrust cases than all the other research about those companies or tech in general by traditional economists focused on competition policy.” — Daisuke Wakabayashi, New York Times

“Build back” means restoring the government and business investments in the productive capabilities of the U.S. labor force that created a growing middle class in the three decades after World War II

On the occasion of the ASSA 2021 Virtual Annual Meeting (Jan. 3-5), Peter Bofinger presents a “10 Best of” Mankiw list

Dr. Anthony Fauci tells host Steve Clemons that the United States can go back to “normal” in the autumn, which starts in September 2021, if 70-85 percent of Americans get vaccinated by the summer.

Warnings of “corruption and incompetence coming together,” as economists William Lazonick and Öner Tulum study the race to end the pandemic.

“If you want to make the world a more equal place, you need to understand the tools.”

After years of amassing power, the tide is turning against the tech monopolies

Even if psychological factors influence participants’ decision-making, as behavioral economists compellingly argue, incorporating such factors into economic theory would seem to require that market participants adhere to elementary logical rules.

In this interview, Folashadé Soulé and Camilla Toulmin speak with Carl Manlan, the Chief Operating Officer of the Ecobank Foundation - responsible for Ecobank’s social impact engagement with the communities in which the bank operates in Africa – on the role of African philanthropy and corporate social responsibility in the response to COVID-19 on the continent.

Trump’s approach largely failed because the problem can’t be solved by tariffs. Here’s the answer.

Riccardo Bellofiore explains how managerial capitalism of the post-war era entered into a crisis of profitability in the 1970s, and subsequently metamorphized into a new stage, where the role of banks changed, households became net borrowers and businesses net lenders.

“That starts to take tech regulation to a place that’s more similar to financial regulation, which is where it should be. On that note, check out this very interesting INET paper by Dina Srinivasan, which looks at how Google monopolises advertising markets in ways that would be prohibited in other electronic trading markets.” — Rana Foroohar, Financial Times

Joseph Bosco former China country director in the U.S. Office of the Secretary of Defense, and Jack Gao, Program Economist at INET appeared on Arirang News to discuss whether the U.S.-China rivalry will improve under a Biden administration.

Three American researchers, crossing the figures for growth and mortality due to the Covid-19 pandemic from many countries, conclude that containment is effective, provided it is accompanied by strong public subsidies.

“But some progressives are worried that “Biden is working backwards from identity,” as one longtime political observer put it, designing a cabinet stocked with diversity but less focused on making the changes that many progressives see as long overdue, both in terms of domestic and foreign policy. “I applaud the formidable progress in the diversity of cabinet and key administration appointments. It is long overdue for America,” said Robert Johnson, the president of the Soros-backed Institute for New Economic Thinking. “But it is not a substitute for taking on monied power interests to produce reform leading to broad-based prosperity. If identity politics is used as a mask to avoid that enormous challenge, it will be very dangerous for the already polarized politics of the USA.” — Michael Hirsh, Foreign Policy

“Political scientist Thomas Ferguson, an authoritative scholar on money and electoral politics, has a valuable and established political science theory called “the investment theory of politics.” He demonstrates that the U.S. is essentially controlled by coalitions of investors who come together around some mutual interest. Thus, “to participate in the political arena, you must have enough resources and private power to become part of such a coalition…. McGuire and Delahunt advance the thesis by showing it is actually worse than what others have found. Their study reveals and confirms that the top wealthiest 10 percent ultimately always win on policy — effectively showing that anyone else’s opinion outside of the top 10 percent rarely matters.” — Rajko Kolundzic, Truthout

Private equity’s stake in health care increased rapidly in recent years, reaching a record of 855 deals valued at $100 billion in 2018, according to a March 2020 study published by the Institute for New Economic Thinking, a nonprofit think tank based in New York City. — Janet Colwell, ACP Hospitalist

How electric and self-driving cars could change the industry

How electric and self-driving cars could change the industry

“’human beings must be driven by x’…. well this is a myth about human beings and it’s not really the way we work, but the religion of capitalism insists that it is true. This is a sacred idea that competition is ultimately for the best of society, that the market will decide what is best, not governments or we the people. I think one of the things that Eugene McCarraher who wrote this book, “The Enchantments of Mammon” susses out in a very nuanced way, is how our country is built on these sort of opposing ideas. On the one hand we have this idea of competition and then we have another religious idea about brotherhood which is also baked into the sacred text of our nation. These two things are kind of ill-fitting and trying to make them work together is something we’re still struggling with right now.” — Lynn Parramore

Can developing countries cope with high debt levels? How dire is the situation? Has the policy response been adequate? And what’s the situation in private external debt, and what should be done about private creditors? This edition of Debt Talks will discuss the situation in developing country debt during and after the COVID-19 pandemic.

A look inside the byzantine world of online ads

A response to Jason Furman and Lawrence Summers

“the vaccines developed by these companies were developed thanks wholly or partly to taxpayer money. Those vaccines essentially belong to the people — and yet the people are about to pay for them again, and with little prospect of getting as many as they need fast enough. … mounting pressure from poor countries at the W.T.O. should give the governments of rich countries leverage to negotiate with their pharmaceutical companies for cheaper drugs and vaccines worldwide. Leaning on those companies is the right thing to do in the face of a global pandemic; it is also the best way for the governments of rich countries to take care of their own populations, which in some cases experience more severe drug shortages than do people in far less affluent places.” — Achal Prabhala, Arjun Jayadev and Dean Baker

“Calculations by Phillip Alvelda, Thomas Ferguson and John Mallery, which have just been published by the Institute for New Economic Thinking, suggest how scary the choice between life and business is in the corona crisis . A comparison of all possible countries and strategies over the past year then gave a fairly clear picture: Those who consistently aimed to stop the epidemic through hard lockdowns have significantly fewer deaths - even if they initially suffered greater economic damage; while it is with countries like the UK it was exactly the opposite, which initially hesitated with the lockdown and raised all the more money to avoid economic damage. With the fatal result that precisely because of this, the second wave became all the more violent - and economic output collapsed in the end. Conclusion of the study: The more negligent governments allow the pandemic to work in order not to harm the economy, the more the economic costs will pile up over time and ever new waves. Almost no matter how hard these rulers and central bankers try to counter it with economic stimulus programs. The damn virus finds activity between people (also economic) pretty good.” — Thomas Fricke

“Ferguson, whose research has shown that candidates who raise more money stand a much greater chance of winning election, added that “when you get that much money pouring into the election, it means that you have all these investors who decide which election is ‘worth it’ and that tends to pull even liberal democrats to the right. It is a somewhat subtle effect but a very real one and clearly an anti-democratic consequence of the system.” — Andrew Kennis

“Critics led by William Lazonick, economics professor emeritus at the University of Massachusetts Lowell, say buybacks starve companies of cash for innovation and worker pay, and favor executives aiming to jack up the stock prices because their compensation is increasingly stock-based. The buyback trend has become controversial since a 2014 article by Prof. Lazonick in the Harvard Business Review, “Profits Without Prosperity.” The S&P 500 companies that had been publicly listed from 2003 through 2012, he found, had spent amounts equal to 54% of their earnings for buybacks and 37% for dividends, leaving “very little for investments in productive capabilities or higher incomes for employees.” — Randall Smith

“If companies continue to prioritize maximizing shareholder wealth at the expense of other key stakeholders, and at the expense of investing in innovation, then the Green New Deal could reinforce long-standing income and wealth inequities and the decline in innovation in the U.S. economy (for an important example, Bill Lazonick and Matt Hopkins document how maximizing shareholder value minimized the strategic national stockpile for ventilators and personal protective equipment).” —Lenore M Palladino

“Now, in a powerful work of synthesis, economist Lance Taylor, assisted by Özlem Ömer of Nevsehir Haci Bektas Veli University in Turkey, has brought a new perspective to the discussion. Taylor is a rare figure among economists nowadays. Previously a professor at two of the established citadels of mainstream economics, Harvard University and MIT, he has spent the past generation at the New School for Social Research in New York City, and is deeply engaged with the Institute for New Economic Thinking. … The overriding message from Taylor’s work is the exact opposite of “trickle-down economics.” Reducing inequality will increase economic growth and productivity. But, at the end of the day, there is no magic bullet to reverse the impact of the structural transformation of the past 50 years. That, too, was driven by policy initiatives, the full implications of which many policymakers are only just now beginning to comprehend.” — William Janeway

“Rich economies have more resources to spare to prioritise saving lives. And Wolf reproduces the Institute for New Economic Thinking’s now famous chart that refutes the idea there is a “trade-off” between saving the economy and saving lives. On the whole, those states that prioritised saving lives also lost less economic output. China is the standout case. But it isn’t just about how rich an economy is. The same chart shows that the states that suffered the biggest losses of lives and output include Italy, Britain, Spain, and France. The US and Belgium aren’t far behind.” —Alex Callinicos

“A look around the world shows that so far no country has managed to effectively protect its risk groups when the number of infections is high - Sweden at the beginning of the pandemic or Switzerland in the second wave also had to pay for their special routes with many deaths. And if such a strategy fails, you have wasted valuable time and may find yourself confronted with an infection that is completely out of control. This would mean a collapse of the health system with all the ensuing consequences. This also includes immense damage to the economy. This is also confirmed by a study by the Institute for New Economic Thinking. Those who reacted belatedly or wavered between strategies not only had very high casualties, but were also the most damaging to their economies, it said. The authors cite Great Britain as a negative example.” — Klaus Wedekind

“The “go-hard/go-early and no regrets” approach of the Australian states has been vindicated by the Institute for New Economic Thinking (INET), a nonpartisan, nonprofit organisation established in the wake of the 2009 global financial crash.” …. “We must be ready to accept renewed restrictions, targeted shutdowns and border closures. As the INET report clearly demonstrates, the failure to act is much more costly than any temporary measures, such as those used in South Australia last month.” — Dennis Atkins

George Soros’ latest op-ed in the Project Syndicate reasserts his view how perpetual bonds could help the European Union overcome its deadlock on fiscal spending.

No one person or perspective holds the key to solving economic problems, says Jay Pocklington of the Institute for New Economic Thinking

The central challenge confronting us in the future of work is this: can we create a future where work exists for all who need one with fair rewards, or will we end up on the path of increasing displacement, leaving workers vulnerable, dispensable, and miserable?

Individual EU member states ought to issue perpetual bonds

The perverted dreams of western modernity and capitalism may be exhausting themselves, says author Eugene McCarraher. And that’s something to be thankful for.

“Actual experience, as opposed to cost-benefit analyses of theoretical alternatives, further strengthens the case for suppressing the disease fully, where feasible. A recent paper from the Institute for New Economic Thinking, To Save the Economy, Save the People First, suggests why. A chart (reproduced here) shows that countries have followed two strategies: suppression, or trading off deaths against the economy. By and large, the former group has done better in both respects. Meanwhile, countries that have sacrificed lives have tended to end up with high mortality and economic costs.” — Martin Wolf, The Financial Times

“To save the economy, you have to save people first, is the title of a paper by Alvelda, Ferguson and Mallery of the Institute for New Economic Thinking. This work groups countries into three categories, according to the response to the covid: those that gave priority to maintaining economic life; those who focused on taking care of health first and those who wanted to be placed in the middle, but did not do either one well. The best economic results correspond to those who prioritized health. They are countries that are in Asia and Oceania, mainly. The worst are in the other two groups. Those who did not define one or the other, got the worst of both worlds: many deaths and great economic damage. What can be done? Alvelda, Ferguson, and Mallery recommend targeted subsidies by regions and sectors hardest hit; guarantee income for workers in non-essential activities and subsidize health safety measures for all those who cannot stop. This means, among other things, public money to make public transport and some massive workplaces more sanitary. Subsidize supervision / surveillance measures in spaces where many people go: shopping centers and places of religious worship, for example.” — Luis Miguel Gonzalez, El Economista (translated from Spanish)